How to Calculate Dividends on a Cash Flow Statement
Original post by D. Laverne O'Neal of Demand Media
Among the three primary financial documents of a company, the cash flow statement includes no accounting related assumptions. It presents a picture of how much cash is coming into and going out of a business. The cash flow statement, however, does not include the dividend payout figure. That number is to be found on the balance sheet. The savvy investor, however, can calculate the dividend payout from cash flow statement entries.
Find the dividend payout ratio. It will be expressed as a percentage.
Find the free cash flow figure.
Multiply the free cash flow figure by the dividend payout ratio to arrive at the dividend payout amount.
- Magic Diligence: Understanding the Cash Flow Statement; January 2009
- Money-Zine: Building a Cash Flow Statement
About the Author
D. Laverne O'Neal, an Ivy League graduate, published her first article in 1997. A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday. O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, health, personal finance and personal growth.